Constellation Brands Inc (NYSE: STZ) did great during the pandemic and it will do just as well during a recession, says Gina Sanchez. She’s the CEO of Chantico Global.
Sanchez explains why she likes STZ
The stock is down only 3.0% versus the start of 2022, which, in itself is an achievement considering the ongoing bear market. Explaining why it’s attractive, Sanchez said on CNBC’s “The Exchange”:
The pandemic had a lot of day drinking; it had a lot of drinking in general. Funny but recessions also cause that. So, we’re still expecting some pretty strong growth, almost 16% to 17% growth is expected next year.
In its latest reported quarter, the alcoholic beverage company handily beat Wall Street expectations. It forecasts up to a 9.0% increase in beer net sales this year. Constellation Brands is the largest beer important company in the United States.
Constellation Brands can survive inflation
Sanchez also likes the NYSE-listed company on a healthy operating margin that she says is rather essential to weather the ongoing inflationary pressures.
If inflation is driven by commodities rather than the kind that interest rate hikes tend to address, then you care about operating margins. STZ has got a 26% margin; that’s a pretty big space to be able to deal with really persistent inflation.
Earlier this week, Morgan Stanley also reiterated the Victor-headquartered company as its “top beverage pick” and raised its price objective to $298 a share that represents a more than 20% upside from here.
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Source: https://invezz.com/news/2022/06/24/gina-sanchez-constellation-brands-will-do-good-in-a-recession/